The  Railways  and  the 
Government 


ADDRESS  BY 
HOWARD  ELLIOTT 

At  the  Annual  Dinner  of  the 
Railway  Business  Association 


December  11,  1913 


REQUESTS  FOR  COPIES 
of  this  pamphlet  will  be  welcome  from  all 
those  desiring  to  place  it  in  the  hands  of 
their  representatives  or  friends.  Copies  fur¬ 
nished  or  sent  direct  to  lists  upon  application 
to  Frank  W.  Noxon,  Sec’y,  Railway  Business 
Association,  30  Church  Street,  New  York. 


Form  B 


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Q  K 

0 


The  Railways  and  the  Government 

Address  by 
Howard  Elliott 

Chairman  of  the  New  England  Lines 


Delivered  at  the  Fifth  Annual  Dinner  of  the  Railway  Business 
Association,  the  national  association  of  manufacturers  of 
railway  materials,  equipment  and  supplies,  at  the  Waldorf- 
Astoria  Hotel,  New  York,  December  11,  1913 


This  is  a  gathering  of  representative 
men  who  contribute  much  to  the  in¬ 
dustrial  activity  and  prosperity  of  the 
nation.  The  opportunity  of  speaking 
to  you  was  accepted  with  hesitation, 
and  only  because  it  gives  me  a  chance 
to  meet  many  old  friends  and  make,  I 
hope,  some  new  ones,  and  also  because 
gatherings  like  this  help  us  to  appre¬ 
ciate  our  mutual  interests.  It  is  well 
to  talk  over  those  problems  which  the 
remarkable  social  and  industrial  evo¬ 
lution  of  the  nation  has  placed  upon 
the  business  men,  who  are  anxious 
that  this  country  shall  progress,  and 
^“^who  believe  that  the  social  and  intel¬ 
lectual  advancement  of  the  people  de¬ 
pends  upon  reasonable  success  in  all 
1  forms  of  industry — a  class  of  men 
also  who  are  as  high-minded  and 
patriotic,  and  as  great  believers  in  the 
United  States  and  its  future  as  any 
class  of  men  in  the  country. 

°  INDUSTRIAL  INTERDEPENDENCE 

The  rapid  increase  in  the  country’s 
population,  accompanied,  as  it  has 
been,  by  a  racial  mingling  unprece- 
*  dented  in  history,  has  produced  new 
economic  conditions  and  has  brought 


to  the  fore  new  problems  and  new 
theories  of  the  relation  of  the  govern¬ 
ment  and  the  citizen  in  his  business. 
The  application  of  the  principle  of 
increasing  government  supervision  of 
business  emphasized  more  than  ever 
before  the  interdependence  of  all 
industry. 

The  industries  which  you  and  I 
represent  are  very  closely  related. 
Lack  of  sustenance  and  stagnation  in 
one  affects  the  others.  If  the  railways 
of  this  country  are  to  be  maintained 
and  operated  as  they  should  be,  in¬ 
creasing  their  facilities  to  meet  the 
increased  demand  of  the  growing 
business  of  the  nation,  then  they  must 
be  supplied  with  materials,  and  this 
benefits  the  many  industries  which 
you  represent.  These  purchases  of 
the  railway  stimulate  the  activities 
of  the  whole  country  (applause).  On 
the  other  hand,  any  curtailment  in  the 
purchasing  power  of  the  railway  will 
have  a  withering  effect  on  many  in¬ 
dustries  and  retard  the  prosperity  of 
some  which  have  been  leading  factors 
in  the  commercial  growth  and  expan¬ 
sion  of  the  nation. 


3 


RAILWAY  GROWTH 

The  growth  of  the  railways  in  the 
United  States  is  without  a  parallel  in 
any  other  nation.  In  their  present 
form  these  railways  have  been  con¬ 
structed  practically  within  the  last 
fifty  years.  The  total  operating  rev¬ 
enues  of  railways  earning  $1,000,000 
or  more  for  the  fiscal  year  ending  June 
30th,  1913,  were  $3,057,089,811,  of 
which  $2,134,563,789  came  from 
transportation  of  freight  and  $678,- 
440,089  from  carrying  passengers.  In 
the  same  year  these  railways  paid  out 
for  expenses  $2,118,529,173,  of  which 
$407,156,008  was  for  maintenance  of 
way  and  structures,  $501,663,582  for 
maintenance  of  equipment,  $1,074,- 
914,428  for  the  actual  expenses  of 
transportation,  and  $134, 795, 155  for 
administration  and  traffic  expenses. 
The  net  operating  revenues  of  the  rail¬ 
ways  of  the  country  in  the  last  fiscal 
year  amounted  to  $938,560,638,  out  of 
which  was  paid  in  taxes  $123,682,118. 

The  railways  east  of  the  Mississippi, 
and  north  of  the  Ohio  and  Potomac 
Rivers  in  the  same  year  did  a  business 
of  $1,386,073,429,  of  which  $992,- 
403,390  was  from  freight,  and  $293,- 
234,927  from  passengers  carried.  For 
the  three  items  which  make  up  be¬ 
tween  90  and  95%  of  the  expense  of 
operation,  maintenance  of  equipment, 
maintenance  of  roadbed,  bridges,  etc., 
and  transportation,  these  roads  spent 
in  1913  $246,727,105  for  maintenance 
of  equipment;  $180,273,335  for  main¬ 
tenance  of  tracks,  bridges,  etc.,  and 
$502,734,000  for  transportation. 


THE  RAILWAY  PAYROLL 

Everyone  admits  now  that  the 
transportation  question  in  this  country 
is  a  very  vital  one,  and  these  few 
figures  are  given  to  emphasize  its  im¬ 
portance.  And  the  importance  to  the 
general  welfare  is  not  alone  in  the 
service  rendered  by  transporting  man 
and  his  property,  but  also  because  the 


railway  is  a  great  paymaster.  The 
railway  payroll  is  one  of  the  greatest 
payrolls  in  the  country;  more  than 
1,700,000  employees,  receiving  in 
wages  and  salaries  last  year  nearly 
$1,250,000,000.  Adding  the  families 
of  those  employees,  there  are  nearly 
7,000.000  people,  about  7%%  of  the 
total  population,  supported  by  this 
payroll.  Think  of  what  this  means 
to  the  communities  in  which  these 
railway  employees  live,  to  the  trades¬ 
men  to  whom  their  earnings  go  for 
food  and  clothing !  Think  of  the  effect 
upon  the  business  interests  of  this 
country  generally  of  the  distribution 
of  this  sum  of  money,  passing  through 
the  hands  of  this  multitude  of  pur¬ 
chasers  into  the  channels  of  trade. 
It  would  be  difficult  to  find  a  person 
in  this  country  who  is  not,  in  one  way 
or  another,  benefited  by  this  employ¬ 
ment  of  labor.  The  railway  employee 
is  an  important  factor  in  his  com¬ 
munity,  and  there  is  no  better  proof 
of  the  theory  that  the  prosperity  of 
a  railroad  and  the  section  it  covers 
are  interdependent  than  that  fur¬ 
nished  by  the  part  the  railway  em¬ 
ployees’  purchases  play  in  helping 
business. 

Out  of  $2,750,667,435  which  the 
railways  earned  in  1910,  $1,143,725,- 
306,  or  41.58%  were  distributed  in 
wages  and  salaries;  in  1911,  out  of 
$2,789,761,669,  $1,208,466,470,  or 

43.32%,  and  in  1912,  out  of  $2,826,- 
917,967,  $1,243,113,172,  or  43-97%. 
And  each  year  this  wage  distribution 
has  been  taking  a  larger  proportion 
of  the  railway  dollar.  Between  1910 
and  1911  there  was  an  increase  of 
5.66%  in  the  payroll  and  only  1.42% 
in  the  operating  revenues.  Between 
1911  and  1912,  the  increase  in  the 
payroll  was  2.87%,  and  in  operating 
revenues  1.33%.  There  are  no  very 
complete  statistics  of  the  amount  of 
material  purchased  by  the  railways, 
but  it  is  very  large,  many  hundreds 
of  millions  of  dollars. 


4 


Obviously,  as  an  abstract  proposi¬ 
tion,  because  of  its  effect  on  general 
business  activities  and  upon  the  wel¬ 
fare  and  happiness  of  so  many  people, 
everybody  must  want  this  great  pay¬ 
roll  maintained,  and  want  the  rail¬ 
ways  to  go  on  spending  money.  Cur¬ 
tailment  of  the  railway  purchasing 
power,  or  a  diminution  of  its  payroll, 
%  would  be  felt  in  millions  of  homes. 
A  continued  improvement  of  the  rail¬ 
way  will  stimulate  trade,  give  a  gen¬ 
eral  steadiness  to  business,  and 
minimize  depression.  The  money  the 
railways  would  spend  in  expanding 
their  facilities  as  they  should  be  ex¬ 
panded,  to  keep  pace  with  the  growth 
of  business  in  the  country,  would 
percolate  into  every  conceivable  artery 
of  trade.  Can  it  be  doubted  that  this 
would  impart  that  wholesome  stimulus 
to  business  that  is  so  anxiously 
awaited  at  the  present  time? 

To  a  large  extent  the  railway  is 
simply  a  collecting  and  distributing 
agency  of  the  sums,  small  in  units  but 
large  in  the  aggregate,  that  the  public 
pays  for  the  service  it  performs.  The 
railway  owner  retains  for  himself 
what,  compared  with  many  forms  of 
other  business,  is  a  relatively  small  re¬ 
turn  on  the  value  of  the  railway  plant. 
If  there  is  to  be  a  halt  in  railway  ac¬ 
tivity,  if  the  railways  of  the  country 
are  to  be  forced,  by  the  conditions  im¬ 
posed  upon  them,  to  abandon  all  new 
construction  and  restrict  their  outlay 
to  the  absolute  necessities  of  mainte¬ 
nance  and  operation,  what  will  be  the 
result  ?  Will  there  not  follow  a  corre¬ 
sponding  contraction,  especially  in 
those  industries,  many  of  them  very 
large,  which  the  railroad  helps  to  sup¬ 
port,  and  be  imparted  by  them,  in  turn, 
through  still  other  trade  channels  until 
an  adverse  influence  is  felt  throughout 
,  the  entire  business  life  of  the  country. 
For  example:  The  railways  purchase 
a  very  large  proportion  of  all  the  iron 
and  steel  made  in  this  country.  Thus 
♦  their  prosperity  is  very  closely  inter¬ 
woven  with  the  prosperity  of  the 


great  metal  industry  of  the  country, 
and  upon  this  industry  enforced  econ¬ 
omies  and  the  suspension  of  con¬ 
struction  by  the  railways  will  have  a 
most  serious  effect. 

RAILWAY  EARNINGS 

There  is  indisputable  evidence  that 
that  expansion  of  our  railways  which 
has  contributed  so  much  to  the  coun¬ 
try’s  prosperity  has,  by  reason  of  the 
conditions  now  imposed  upon  them, 
reached  a  point  of  practical  suspen¬ 
sion.  There  is  hardly  any  new  con¬ 
struction  being  undertaken,  and  im¬ 
provements  are  being  postponed 
wherever  practicable,  because  of  lack 
of  funds.  This  is  due,  in  part,  to  the 
great  increase  in  the  cost  of  labor  and 
materials,  in  part  to  the  elaborate  and 
luxurious  facilities  which  the  people 
demand,  and  in  part  to  the  rise  in  the 
rates  of  interest,  all  of  which  is  re¬ 
flected  in  the  loss  in  net  earnings 
shown  by  recent  statements  of  the 
railways;  and  this  despite  an  increase 
in  gross  earnings  maintained  until 
very  recently,  though  there  are  signs 
today  of  a  falling  off  even  in  gross. 
In  the  case  of  the  Eastern  roads,  the 
gross  earnings  increased  $187,000,000 
from  1910  to  1913,  while  operating 
expenses  and  taxes  increased  $201,- 
000,000,  the  increase  in  tax  payments 
alone  amounting,  in  those  three  years, 
to  $11,590,000.  There  was  an  actual 
decrease  in  the  net  operating  income 
of  these  roads  of  $16,311,000.  In 
1913,  these  railways  earned  in  gross 
$1,424,000,000.  Their  net  operating 
income  was  $336,754,000,  and  after 
payment  of  interest  on  funded  debt 
and  other  obligatory  charges,  there 
was  left  $206,600,000.  The  dividends 
paid  out  of  this  amounted  to  $130,- 
000,000,  which  was  5.10%  on  the 
capital  stock  outstanding.  This  was 
$19,000,000  less  than  the  dividends 
paid  in  1912  and  $7,000,000  less  than 
the  dividends  paid  in  1910. 

In  the  Central  Freight  Association 
territory,  a  group  of  twenty-eight 


5 


roads,  having  23,167  miles  of  road,  or 
51.5%  of  the  entire  mileage  in  the 
territory,  roads  like  the  Big  Four, 
Vandalia,  Wabash,  Chicago  and 
Alton,  and  Illinois  Central,  in  the 
year  ending  June  30,  1913,  earned 
$63,000,000  more  than  in  the  panic 
year  of  1908,  but  their  operating  ex¬ 
penses  and  taxes  were  $62,000,000 
more,  and  after  paying  expenses  and 
taxes,  their  net  operating  revenues 
were  only  $811,000  more  than  in  1908, 
and  their  net  corporate  income  was 
actually  $8,000,000  less,  although  in 
these  five  years  $180,000,000  of  new 
capital  had  been  invested  in  these 
properties. 

The  reduction  in  net  is  shown  very 
strikingly  in  the  statements  of  the 
New  York  Central,  the  Pennsylvania, 
and  the  New  Haven  for  the  first  four 
months  of  the  present  fiscal  year.  In 
this  period,  the  New  York  Central 
Lines  showed  an  increase  in  gross 
earnings  of  $4,339,442,  as  compared 
with  the  same  period  of  1912,  but  as  a 
result  of  increased  expenses  there  was 
a  decrease  in  the  net  earnings  of 
$7,614,542.  The  Pennsylvania,  for 
the  same  period,  showed  an  increase 
in  gross  earnings  of  $5,100,192,  but 
a  decrease  in  net  earnings  of  $4,367,- 
795,  while  the  New  Haven,  including 
all  transportation  lines  in  which  it  is 
interested,  showed  a  decrease  of 
$79°>379-12  in  the  gross,  and  $4,020,- 
31 1. 5 1  in  net  operating  revenue,  and 
of  $4,934,725.01  in  net  corporate  in¬ 
come,  after  allowing  for  all  fixed 
charges  of  every  kind. 

THE  RAILWAY  PROBLEM 

I  think  that  all  candid  and  thought¬ 
ful  persons  will  admit  that  the  situa¬ 
tion  as  reflected  here  is  a  serious  one, 
not  only  as  affecting  the  railways 
themselves,  but  the  entire  business  of 
this  country.  Indeed,  with  railway 
credit  impaired,  it  would  seem  difficult 
for  the  railways  to  extricate  them¬ 
selves  from  the  present  situation  unless 
a  change  occurs  in  public  sentiment 


and  in  the  treatment  they  receive 
from  the  people,  as  expressed  through 
their  various  governmental  agencies. 
Undoubtedly,  various  causes  have 
contributed  to  bring  this  situation 
'about.  Some  of  these  have  been  « 
economic  and  some  social,  and  the 
railway  has  suffered  from  both,  per¬ 
haps,  more  than  any  other  industry 
in  that  the  price  of  its  service  is  no  ^ 
longer  within  its  own  control,  and 
the  same  may  be  said  of  its  great 
payroll. 

Is  it  not  incumbent  upon  all 
thoughtful  men  who  wish  to  see  this 
country  continue  to  prosper  to  stop 
and  ask  themselves  what  can  be  done 
in  this  emergency?  Is  this  trouble 
a  socialistic  one,  due  to  new  currents 
of  thought  and  feeling  in  the  minds  of 
a  majority  of  our  citizens,  fostered 
possibly  by  ideas  of  government 
brought  here  by  many  of  our  new 
citizens  from  the  Old  World,  who 
influence  many  others  with  whom 
they  come  in  contact?  And  if  the 
trouble  is  socialistic,  does  it  not  be¬ 
hoove  every  citizen  who  does  not 
believe  in  this  kind  of  doctrine  ap¬ 
plied  to  business  to  speak  out? 

PRESENT  TENDENCIES 

Many  of  us  have  hazy  ideas  about 
socialism,  but  the  principle  under¬ 
lying  the  proposed  socialistic  state, 
as  expressed  by  many  socialists,  is 
that  from  every  one  shall  be  expected 
according  to  his  ability,  and  that  to 
every  one  shall  be  given  in  accord¬ 
ance  with  his  needs.  The  socialistic 
ideal  thus  expressed,  is  that  every 
man  shall  do  his  utmost,  but  that  he 
is  not  to  be  paid  in  proportion  to  the 
amount  of  work  that  he  does,  or  in 
proportion  to  its  value,  but,  on  the 
contrary,  he  is  to  be  paid  in  accord¬ 
ance  with  his  needs.  The  tendency  1 
of  the  people  of  the  United  States, 
however,  seems  to  be  not  to  extend 
to  the  railways  even  that  treatment  . 
which  is  expressed  by  this  socialistic 
ideal  (applause).  Under  that  ideal, 


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the  railways  would  be  expected  to  do 
all  that  they  can,  and  would  be  al¬ 
lowed  to  receive  all  that  they  need, 
but  is  it  not  true  today  that  the  rail¬ 
ways  are  expected  to  do  more  than 
I  they  can,  and,  at  the  same  time,  are 
not  permitted  to  receive  what  they 
need? 

•  THE  HUMAN  FACTOR 

For  example,  first  and  foremost,  the 
railways  are  expected  to  run  their 
trains  without  causing  injuries  or 
deaths  that  would  be  avoidable  by  all 
ordinary  human  precaution.  Yet  dis¬ 
tinction  is  seldom  made  between  the 
need  for  care  and  caution  on  the  part 
of  the  public  and  the  need  for  care 
and  caution  on  the  part  of  those  en¬ 
trusted  with  railway  operation  (ap¬ 
plause).  A  very  large  number  of 
the  injuries  and  half  the  deaths 
charged  against  the  railways  are  of 
trespassers  on  railway  property.  If 
people  will  not  keep  off  railway  prop¬ 
erty  the  law  should  compel  them  to 
do  so  (applause).  Yet,  although  the 
railway  companies  have  time  and 
again  urged  legislatures  to  pass  laws 
against  trespassing,  only  two  or 
three  state  legislatures  have  re¬ 
sponded.  In  other  words,  more  is 
expected  of  the  railways  in  diminish¬ 
ing  the  number  of  casualties  and  fa¬ 
talities  than  they  can  do,  and  there  is 
not  given  them  that  protection  which 
they  need  and  which  the  people  need 
(applause).  Wrecksi  and  accidents 
are  sometimes  due  to  the  delinquency 
of  those  charged  with  the  management 
and  operation  of  a  railway,  and  it  is 
only  right  that  the  managing  officers 
of  a  railway  shotild  be  held  directly 
to  account  for  defects  in  administra¬ 
tion  and  carelessness  in  directing 
operation.  But  there  is  another  side, 

»  and  if  the  officers  are  to  be  held 

responsible  for  the  administration  and 
discipline  the  employees  of  a  railway 
should  be  held  responsible  for  sub- 
)  mission  to  proper  discipline  and 

should  not  consider  their  allegiance  to 


their  brotherhoods  above  their  allegi¬ 
ance  to  the  company  which  employs 
them  (great  applause),  or  their  duty 
to  the  public  who  supply  the  money 
for  their  wages.  The  Interstate  Com¬ 
merce  Commission  has  pointed  out 
that  one  of  the  most  disturbing  causes 
of  accidents  is  the  carelessness  of  the 
railway  employees.  Under  these  con¬ 
ditions,  quite  generally  acquiesced  in 
by  the  public  and  the  press,  the  people 
make  it  difficult  for  the  railway 
managers  to  preserve  the  discipline 
that  the  hazardous  business  of  train 
operation  demands,  and  are  asking 
almost  more  than  the  railways  can 
do  (applause).  If  the  railways  are 
quasi-public  servants,  their  employees 
are  also  quasi-public  servants,  and  the 
people  should  hold  the  man  as  well  as 
the  master  to  his  responsibility  (ap¬ 
plause).  By  not  demanding  this 
responsibility,  the  people  are  not  ac¬ 
cording  to  the  railways  that  which 
they  need  and  that  which  the  people 
need. 

IMPROVEMENTS 

While  the  railways  should  be  held 
directly  to  account  for  maintaining 
roadbed,  track,  and  other  facilities  in 
proper  condition,  the  fact  should  not 
be  lost  sight  of  that  safety  in  opera¬ 
tion,  as  the  people  look  upon  it  to¬ 
day,  means  equipment  of  steel  or 
steel  underframe  in  the  passenger 
service,  and  other  heavy  expenditures 
in  consequence.  To  demand  that  such 
improvements  be  made  within  any 
short  period  of  time,  in  advance  of 
the  ability  of  the  railways  to  pay  for 
them,  is  to  demand  of  the  railways 
more  than  they  can  accomplish.  And 
to  hold  them  down,  and  so  to  impair 
their  credit  that  they  cannot  obtain 
funds  for  such  improvements  is  cer¬ 
tainly  not  to  accord  to  them  that  which 
they  need  (applause).  Again,  in 
insisting  that  they  serve  the  end  of 
efficiency  from  the  standpoint  of  eco¬ 
nomical  operation,  and,  at  the  same 


7 


time,  meet  the  requirements  for  fast 
and  frequent  service,  the  people  de¬ 
mand  of  the  railways  more  than  they 
can  do.  If  they  desire  such  service 
without  allowing  the  railways  the 
compensation  that  justifies  it,  they  are 
not  according  the  railways  what  they 
need. 

In  this  respect,  the  railways  of 
Europe  are  treated  better  than  ours, 
because  there  the  justice  of  charging 
a  higher  rate  for  a  fast  freight  service 
has  been  recognized.  In  Europe,  as 
in  this  country,  there  are  generally 
three  kinds  of  service,  express  freight 
on  passenger  trains,  expedited  or  fast 
freight,  and  ordinary,  or  low-speed 
freight.  But,  while  in  this  country  no 
distinction  is  made  between  the  fast 
and  slow  freight  in  the  matter  of 
compensation,  in  Europe  a  higher 
rate  is  permitted  in  the  case  of  “ac¬ 
celerated  freight.”  Such  a  charge, 
if  permitted  here,  would  increase 
earnings  and  help  the  railroads  to 
make  improvements  now  badly 
needed  and  yet  would  not  impose  an 
undue  burden  upon  the  public  (ap¬ 
plause). 

COMPETITION  VERSUS 
COMBINATION 

There  is  another  respect  in  which 
the  people  of  this  country  are  deal¬ 
ing  at  cross  purposes  with  the  rail¬ 
ways,  and  this  is  a  question  of 
transcendent  importance,  not  only  in 
the  field  of  transportation,  but 
throughout  industry  and  commerce. 
This  is  a  question  of  competition 
versus  combination.  The  New  Haven 
road  is  a  consolidation  of  189  com¬ 
panies — the  Boston  and  Maine  and 
Maine  Central  of  200  companies. 
Before  the  consolidation  of  these  lines, 
when  it  was  desired  to  move  a  car¬ 
load  of  freight  from  one  end  of  New 
England  to  another,  separate  ar¬ 
rangements  had  to  be  made  and  vary¬ 
ing  instructions  issued  for  each  rail¬ 
way  and  endless  bargaining  and 


higgling  over  rates  and  schedules,  as 
well  as  the  expense  of  many  separate 
organizations.  In  this  combination  of 
separate  railways  in  one  organic 
whole,  there  is  the  possibility  of  effi¬ 
ciency,  under  proper  management, 
both  from  the  standpoint  of  economi-  * 
cal  operation  of  the  railways  and  from 
the  public’s  standpoint  of  improved 
service.  Because  of  practices  incident 
to  the  great  construction  period  of 
American  development  and  not  con¬ 
fined  to  railways,  the  people  created 
the  Interstate  Commerce  Commission, 
which  has  pretty  effectually  not  only 
restrained  competition,  but  stifled  it 
so  far  as  rates  are  concerned.  As  the 
Commission  has  the  power  to  prevent 
the  railroads  from  charging  unreason¬ 
able  rates  and  to  prevent  unjust  dis¬ 
crimination,  it  is  a  grave  question 
whether  it  is  not  an  economical  error 
to  object  to  combinations  of  railways 
which,  under  suitable  management, 
can  be  made  to  serve  the  ends  of  effi¬ 
ciency  by  more  economical  operation 
and  better  service  (applause).  Here 
again  we  find  an  inconsistency  on  the 
part  of  the  people,  who  insist  that 
the  railways  shall  practise  the  greatest 
economy  and  efficiency  in  operation, 
but  who,  at  the  same  time,  object  to 
principles  that  will  further  such 
economy.  If  the  railways  are  not 
supported  by  the  people  they  cannot 
render  service  to  the  people.  The 
very  expression  “The  Railroads  and 
the  People”  indicates  a  distinction,  a 
separation  of  interests,  that  the  pros¬ 
perity  or  the  adversity  of  the  rail¬ 
ways  is  a  matter  of  indifference  to  the 
people,  and  vice  versa.  Such  a  feel¬ 
ing  occasionally  finds  expression  in 
such  an  utterance  as  was  made  re¬ 
cently  in  the  New  Orleans  Picayune, 
which  editorially  called  upon  the 
voters  to  oppose  any  candidate  wrho 
was  not  “fully  competent  and  willing  1 
to  place  the  peoples’  interests  above 
those  of  the  railroads  and  trans¬ 
portation  lines  under  all  circum¬ 
stances,”  when,  as  a  matter  of  fact. 


8 


their  interests  are  identical.  One 
reason,  I  believe,  for  this  attitude,  is 
that  our  people  do  not  realize  that 
railroading  is  business  just  as  much 
as  rail  making  or  producing  paint  is 
business,  and  that  railways  are  as 

1  much  a  part  of  every-day  life  as  any 
other  business. 

^  MULTIPLICITY  OF  LAWS 

There  are  state  legislatures  which 
pass  laws  concerning  the  railways 
within  their  state  and  the  laws  of  one 
state  sometimes  conflict  with  those  of 
another,  and  sometimes  with  those  of 
the  national  government.  The  effect 
of  this  multiform  and  heterogeneous 
regulation  is  to  compel  the  railroads 
to  serve  forty-nine  masters,  although 
the  impossibility  of  serving  even  two 
masters  has  been  crystalized  in  a 
proverb  (applause).  The  effect  of 
this  multiplicity  of  laws  also  has  been 
to  undermine  the  confidence  of  in¬ 
vestors,  whose  money  is  needed  for 
the  extension  and  the  improvement  of 
the  railroads.  It  has  been  estimated 
that  nearly  one  billion  dollars  will  be 
required  within  the  next  year  to  im¬ 
prove  the  railways  so  that  they  may 
meet  the  demands  of  growing  business 
and  safer  and  more  luxurious  service. 
How  can  this  money  be  raised  ?  How 
can  this  condition  be  remedied  ?  Must 
it  not  come  from  co-operation  of  the 
people  with  the  railways  and  from  the 
conviction  in  the  public  mind  that  rail¬ 
ways  are  rendering  to  the  people  not 
only  an  essential  but  a  vital  service? 

GOVERNMENTAL  EFFICIENCY 

If  the  people,  by  reason  of  new  ten¬ 
dencies  of  thought,  are  exacting  more 
of  the  railways  and  allowing  them  less 
in  return  for  service  rendered,  are  the 
people  following  the  same  rule  with 
respect  to  the  great  machine  of  gov¬ 
ernment  which  they  themselves  have 
created,  and  in  whose  management 
they  have  a  potent  voice?  There  has 
been  criticism  of  lack  of  efficiency  in 
railway  administration,  and  some  of 


it  is  just,  because  railway  officers  and 
men  are  human  and  imperfect,  but  as 
a  class  they  are  doing  better  year  by 
year.  As  a  class  they  are  high- 
minded,  patriotic  gentlemen,  dealing 
with  a  problem  that  at  times  is  very 
discouraging.  They  believe  in  frank 
and  honorable  business  methods. 
They  are  doing  the  very  best  they  can 
and  they  should  receive  help  and  com¬ 
mendation  from  the  public  instead  of 
hindrance  and  hostile  criticism  (great 
applause).  Does  the  Government  set 
any  better  example  to  the  business 
men  or  to  the  youth  of  this  country 
of  the  necessity  of  hard,  efficient  and 
high-minded  work?  (applause).  In 
1896  there  were  in  the  Executive  Civil 
Service,  excluding  employees  in  the 
Congress,  the  Judiciary  and  enlisted 
men  and  officers  of  the  Army  and 
Navy,  178,717  persons,  and  in  1910, 
355,635,  an  increase  of  100  per  cent, 
in  14  years.  While  the  population  of 
the  country  has  increased,  it  has  not 
increased  100  per  cent.,  and  is  the 
Government  doing  the  careful,  efficient 
work  the  taxpayer  has  a  right  to  de¬ 
mand?  (great  applause.)  If  the  Gov¬ 
ernment,  with  all  its  power,  has  been 
unable  to  resist  the  demands  for 
greater  elaborateness  and  more  em¬ 
ployees,  can  it  be  expected  that  the 
railways  can  escape  these  same  forces  ? 
(Applause,  and  cries  of  “No,  no.”) 
Again,  does  the  Government  exem¬ 
plify  in  its  own  dealings  with  others 
the  principles  of  justice  and  business 
morality  which  the  people,  through 
this  same  agency,  exact  from  those 
subservient  to  it? 

STANDARDS  OF  CONDUCT 

There  has  been  a  gradual  and  de¬ 
sirable  change  in  the  standards  of 
business  in  the  past  twenty  years,  and 
particularly  in  the  past  ten.  Prac¬ 
tices  that  a  few  years  ago  were  con¬ 
sidered  proper  in  financial,  commer¬ 
cial,  manufacturing,  and  transporta¬ 
tion  business  are  contrary  to  the 
ideas  of  the  public  today. 


9 


In  this  business  uplift,  I  think  the 
great  railway  systems  of  the  country, 
taken  as  a  whole,  are  in  the  front 
rank  in  trying  to  do  their  work  on  a 
high  plane  and  in  trying  to  observe 
the  complicated  laws  of  the  land 
(applause).  And  the  larger  and  more 
complicated  the  business,  the  more 
rigid  is  the  carrying  out  of  the  maxim 
that  “Honesty  is  the  best  policy” 
(  applause) . 

Some  people  are  still  ready  to  ask 
for  the  rebate,  the  pass,  and  the 
special  privilege.  Because  of  some 
glaring  failures  here  and  there  the 
press  and  the  public  sometimes  are  too 
prone  to  condemn  all.  But  every  man 
in  modern  industrial  business  life 
knows  how  insistent  the  majority  of 
men  charged  with  the  responsibility 
of  management  is  for  honesty,  good 
morals,  industry,  and  avoidance  of 
sharp  practice,  and  of  trying  to  get 
something  for  nothing  (applause). 

The  moral  effect  of  this  policy  on 
the  young  man  in  business  must  be 
good,  because  whether  he  likes  it  or 
not,  he  must  behave  or  be  thrown  into 
the  discard.  What  kind  of  an  exam¬ 
ple  does  the  United  States  Govern¬ 
ment  set  before  the  youth  of  the  land 
in  its  treatment  of  the  great  trans¬ 
portation  lines  ?  The  Government 
should  surely  be  as  scrupulously  hon¬ 
est  and  high-minded  in  dealing  with 
the  railways  as  it  expects  the  railways 
to  be  in  dealing  with  the  people,  but  is 
it?  (Applause.) 

RAILWAY  MAIL  PAY 

Look  at  the  mail  and  parcels  post 
situation  for  a  moment.  The  Gov¬ 
ernment  pays  the  railways  for  trans¬ 
porting  the  mail  on  the  basis  of 
weights  obtained  in  the  autumn  of 
1912  for  four  years  beginning  July  1, 
1913,  although  there  is  always  some 
increase  in  weight  each  year.  In  Jan¬ 
uary,  1913,  the  Parcels  Post  began 
with  a  weight  limit  of  n  pounds, 
then  increased  it  to  20,  and  it  is  now, 
in  some  cases,  to  be  50  pounds.  The 


Parcels  Post  takes  business  away 
from  the  express  business  of  the  rail¬ 
way  and  reduces  earnings  in  that  way, 
but  the  Government  pays  nothing  for 
the  extra  weight  carried,  as  the  test 
weighing  was  before  the  Parcels  Post 
began.  So  for  four  years  the  railways  4 
must  carry  the  increasing  weight  of 
the  ordinary  mail  and  the  rapidly 
growing  Parcels  Post  freight  for 
nothing,  unless  the  Government  takes  * 
steps  to  pay  for  service  already  per¬ 
formed  and  to  be  performed,  which, 
so  far,  it  seems  disinclined  to  do 
(applause). 

On  the  New  Haven  Road,  which 
right  now  needs  all  the  help  it  can 
get  (laughter  and  applause),  a  care¬ 
ful  computation  made  by  chartered 
accountants  showed  that  the  company 
was  performing  service  costing 
$743,000  a  year  more  than  it  received ; 
and  what  is  true  of  the  New  Haven 
is  true  of  many  other  roads.  Yet 
there  is  little  criticism  of  the  action  of 
the  Government,  although  it  is  taking 
large  sums  of  money  away  from  the 
railroads  (applause).  Do  you  re¬ 
member  all  the  outcry  there  was,  and 
justly  so,  when  it  was  found  some 
years  ago  that  an  importer  in  Brook¬ 
lyn  was  defrauding  the  Government 
through  false  weights?  (Laughter 
and  applause.) 

The  New  York  Times ,  in  an  edi¬ 
torial  in  October,  1913,  said: 

“Every  receiver  of  a  postal  parcel 
carried  at  the  cost  of  the  railways 
whose  services  are  not  paid  for  is  a 
receiver  of  stolen  goods.”  (Laughter 
and  applause.) 

The  Chicago  Inter-Ocean,  in  com¬ 
menting  on  this,  said: 

“Any  man  who,  merely  because  he 
has  the  power,  compels  another  to 
give  him  unpaid  service,  is  a  robber 
(great  applause).  He  has  taken 
from  the  other  his  time,  his  strength, 
or  his  property  in  some  form,  without 
making  due  compensation.  If  ten 
men  thus  combine  to  rob  eight,  the  im-  r 
morality  remains.  Because  several 


10 


millions  have  combined  ‘through  Gov¬ 
ernment’  thus  to  rob  their  fellow  citi¬ 
zens  who  happen  to  own  railroads, 
the  wrong  of  it  is  not  made  right.” 


SERVICE  WITHOUT  PAY 

This  is  strong  language,  but  is  it  not 
^  true  ? 

Here  are  the  railways,  struggling  to 
make  both  ends  meet,  and  the  Gov¬ 
ernment  takes  service  from  them 
worth,  exclusive  of  the  parcels  post, 
at  least  $15,000,000  per  year,  and  no 
pay.  What  kind  of  an  example  is  this 
for  the  great  United  States  Govern¬ 
ment  to  set  to  the  younger  men  of 
the  country?  (Laughter  and  ap¬ 
plause.) 

The  whole  theory  of  modern  rail¬ 
way  regulation  is  to  secure  honesty 
of  operation  and  fairness  of  treat¬ 
ment  on  the  part  of  the  railway 
toward  all  classes  of  the  public.  Does 
it  not,  therefore,  behoove  the  Govern¬ 
ment  in  all  of  its  relations  with  the 
transportation  companies,  to  treat 
them  with  most  scrupulous  regard  to 
the  dictates  of  honesty  and  fairness? 
Treatment  by  the  Government,  how¬ 
ever,  of  the  question  of  compensating 
the  railways  for  carrying  the  people’s 
mails  suggests  a  lack  of  full  apprecia¬ 
tion  of  this  converse  proposition  by 
some  of  our  highest  governmental 
authorities.  While  not  a  single  defi¬ 
nite  and  practical  step  has  been  taken 
with  a  view  of  compensating  the  rail¬ 
ways  for  carrying  the  additional 
weight  of  the  mail  for  the  period  of 
the  first  six  months  of  the  parcels 
post,  the  Postmaster  General  was  em¬ 
powered,  after  July  first,  to  add  not 
exceeding  five  per  cent,  to  the  pay  of 
the  railways.  But  on  August  15th, 
the  Postmaster  General  increased  the 
weight  limit  from  eleven  to  twenty 
pounds,  and  the  Interstate  Commerce 
Commision,  only  last  week,  gave  its 
approval  to  his  recommendation  of  a 
further  increase  to  50  pounds.  No 
arrangements  were  made,  however, 


and  no  arrangements  have  as  yet  been 
made,  to  compensate  the  roads  for  this 
additional  weight.  Is  it  any  wonder 
that  the  Parcels  Post,  under  such  con¬ 
ditions,  has  been  eminently  success¬ 
ful?  (Laughter  and  applause.)  And 
is  it  any  wonder  that  some  advocates 
of  Government  ownership  have  seized 
upon  its  success  as  an  argument  for 
other  theories,  particularly  with  re¬ 
spect  to  its  efficiency  and  economy? 
(Laughter  and  applause.) 

The  Supreme  Court  has  ruled  that 
the  railways  are  not  compelled  to 
carry  the  mails,  but  that  if  they  do 
carry  them  it  must  be  under  the  rules 
laid  down  by  the  Postmaster  General. 
Any  thinking  man  will  realize  that 
they  could  not  seriously  consider  re¬ 
fusing  to  carry  the  mails.  If  the  law 
compelled  them  to  carry  the  mails 
under  rates  fixed  by  Congress  which 
were  not  compensatory,  they  would 
have  some  standing  before  the  courts, 
but  under  the  law  as  it  stands  they 
must  make  now  a  contract  with  the 
Post  Office  Department  upon  terms 
dictated  by  that  Department,  and  can 
only  appeal  to  Public  Opinion  for  a 
redress. 

THE  RAILWAY  FACTOR 

The  more  men  of  fair  and  unbiased 
minds  study  the  economic  situation  in 
this  country,  affected  as  it  un¬ 
doubtedly  is,  by  some  of  these  experi¬ 
ments  of  Government,  the  more  are 
they  impressed  with  the  importance 
of  the  railway  situation  as  a  factor. 
Sir  George  Paish,  eminent  in  the  field 
of  finance  and  economics,  commenting 
on  the  country’s  condition,  after  a  long 
trip  of  observation,  said  recently: 

“In  considering  the  economic  out¬ 
look  of  the  United  States  in  the  im¬ 
mediate  future,  it  is  evident  that  the 
factor  of  most  immediate  importance 
is  the  application  of  the  railways  of 
the  Eastern  States  to  the  Interstate 
Commerce  Commission  for  an  ad¬ 
vance  in  rates.  The  difficulty  experi- 


ll 


enced  by  the  railways  in  raising  capi¬ 
tal  has  already  caused  many  of  them 
to  reduce  their  new  capital  expendi¬ 
tures,  and  this  reduction  in  a  large 
measure  accounts  for  the  reaction  in 
the  iron  and  equipment  trades  that  is 
now  observable.  If  the  difficulties  of 
raising  new  capital  become  still 
greater,  then  it  is  obvious  that  the 
railway  companies  would  practically 
stop  improvement  works  and  a  se¬ 
rious  setback  in  trade  would  result. 
If,  however,  the  railways  succeed  in 
funding  the  large  amount  of  notes 
which  fall  due  in  the  current  year, 
and  in  raising  the  new  capital  they  re¬ 
quire  to  expend  on  works  of  improve¬ 
ment  and  on  new  equipment,  then  the 
reaction  in  trade,  due  to  international 
conditions  and  other  influences  would, 
in  my  judgment,  be  comparatively 
small.  Thus  the  action  of  the  Inter¬ 
state  Commerce  Commission  in  alter¬ 
ing  or  disallowing  the  railways  of  the 
East  to  advance  their  rates  by  five 
per  cent,  will  have  important  econo¬ 
mic  consequences.,, 

RAILWAY  IMPROVEMENT 
NECESSARY 

With  all  our  troubles,  however,  I 
still  feel  that  we  will  come  out  all 
right,  but — and  this  a  great  big  but — 
care  must  be  taken  in  working  out 
these  problems,  and  the  public  must 
be  told  the  truth,  or  harm  will  be  done 
that  will  take  years  to  cure,  and  the 
best  results  will  be  delayed.  It  is 
foolish,  in  this  country,  to  admit  that 
all  railway  improvement  must  be  given 
up.  These  things  must  go  on;  public 
opinion  will  not  tolerate  a  deteriora¬ 
tion  of  the  railways.  It  will  insist 
upon  their  being  able  to  furnish  the 
service  required  by  growing  business 
and  by  the  very  logic  of  the  situation 
the  public  will  provide  the  means  for 
them  so  to  do.  But  it  is  most  im¬ 
portant  not  to  delay  too  long. 


HOPEFUL  SIGNS 

There  are  some  rifts  in  the  clouds. 
Signs  indeed  are  multiplying  of  a  re¬ 
adjustment  of  ideas  in  the  public 
mind,  which  ought  to  find  a  reflection 
in  the  attitude  of  governmental  agen-  4 
cies.  The  miasma  which  has  arisen 
from  the  misrepresentation  of  the  past 
is  disappearing,  and  the  public  mind  is 
clearing  in  consequence.  That  a  con-  9 
structive  rather  than  a  destructive 
sentiment  is  growing  is  apparent. 

This  drift  in  public  sentiment  is 
clearly  beginning  to  make  itself  felt, 
as  shown  in  some  recent  expressions 
of  a  friendly  nature  coming  from 
those  in  Government  offices.  Such, 
for  example,  was  the  statement  inade 
only  a  short  time  before  his  death  by 
Interstate  Commerce  Commissioner 
Marble:  “We  are  seeking  to  bring 
about  a  condition  that  will  be  fair 
and  equitable  and  that  will  make  the 
railroads  successful  under  present 
ownership.”  (Applause.)  In  the 
newspapers  this  drift  is  finding  ex¬ 
pression  in  a  rebuke  of  continued  criti¬ 
cism  and  intemperate  denunciation  of 
former  practices,  and  a  general  reali¬ 
zation  that  such  a  course  can  only 
produce  widespread  business  atrophy. 

CURING  THE  PATIENT 

National  need  of  terminal  and  other 
railway  facilities  having  been  thor¬ 
oughly  impressed  upon  the  public 
mind,  shippers  and  editors  generally 
convinced  that  larger  net  railway  re¬ 
turns  should  be  permitted,  what  are 
the  reasons  and  perplexities  which 
prevent  the  people  from  giving  effect 
to  a  policy  that  will  cure  the  trouble, 
making  it  unanimous?  Even  if  there 
is  only  a  vigorous  minority  opposed  to 
such  policy,  candid  consideration  of 
their  objections  is  due  them.  , 

It  is  claimed  that  the  management 
of  some  roads  has  not  been  honest — 
that  insiders  have  profited  when  they 
should  not.  The  morals  cf  all  kinds 
of  business  have  improved  year  by 


12 


year,  and  things  have  been  done  in 
railway  and  other  business  in  the  de¬ 
velopment  of  the  country  that  were 
probably  not  right  then  and  that  cer¬ 
tainly  are  frowned  upon  now  by  law 
4  and  public  opinion.  Such  things 
ought  never  to  have  been  done. 
Owners  of  railways  should  root  out 
dishonesty  if  it  exists,  and  if  they  will 

*  not,  public  authority  will  do  it.  But 
is  there  anything  in  the  situation  that 
warrants  calling  a  halt  on  the  develop¬ 
ment  of  the  continent?  (Applause.) 
Every  time  a  clergyman,  a  doctor,  a 
senator,  or  a  cashier  is  punished,  are 
we  forthwith  to  abolish  all  clergymen, 
all  doctors,  all  senators,  and  all  cash¬ 
iers,  while  we  unfrock  that  particular 
clergyman,  convict  that  particular 
doctor,  expel  that  particular  senator, 
or  jail  that  particular  cashier? 

RAILWAY  SECURITIES 

Others  say  that  some  railways  are 
over-capitalized.  Whether  they  are  or 
not,  and  certainly  American  roads 
have  led  the  world  in  refraining  from 
it,  no  more  capitalization  ought  to  be 
created  than  is  necessary  in  order  to 
serve  the  public.  If  too  much  was 
issued  by  some  roads  in  the  past,  this 
is  to  be  regretted,  but  no  workable 
method  has  been  suggested  by  which 
securities  issued  legally  and  bought  in 
good  faith  can  be  taken  from  their 
owners  without  failures  and  receiver¬ 
ships  that  harm  many  more  people 
than  the  owners  of  the  securities. 
(Applause.)  As  for  the  future,  ever}’’ 
railway  of  importance  runs  through 
one  or  more  states  which  regulate 
security  issues.  And  apart  from  that, 
those  responsible  for  railway  manage¬ 
ment  realize,  as  they  never  did  before, 
the  absolute  necessity  of  sound  busi¬ 
ness  principles  in  issuing  securities, 

*  law  or  no  law.  The  present  problem 
is  not  to  restrict  the  issues  of  securi¬ 
ties  but  to  find  people  willing  to  buy 

^  them.  (Laughter  and  applause.) 

Another  says  that  if  securities  were 
sold  over  the  counter  the  bankers’ 


commission  would  be  saved.  Perhaps, 
some  day,  if  confidence  can  be  re¬ 
stored,  part  of  such  commissions 
might  be  saved,  but  a  railroad  must 
have  financial  experts,  as  well  as  en¬ 
gineering  experts,  and  pay  a  fair  price 
for  services  rendered.  If  the  commis¬ 
sions  can  be  saved,  they  ought  to  be. 
But  not  even  city,  state  and  federal 
governments,  whose  credit  is  based  on 
the  taxing  power,  have  been  able  at  all 
times  to  float  even  moderately  large 
popular  loans  without  the  aid  of 
bankers.  (Applause.) 

Others  object  because  they  say  the 
new  revenue  would  go  to  increased 
dividends.  So  some  of  it  would  and 
must.  The  dividend  which  a  stock¬ 
holder  receives  is  not  all  that  he  would 
like  or  that  his  managers  want  to  pay, 
but  is  an  amount  needed  to  induce  him 
and  others  to  buy  more  stock  or  bonds 
when  an  enlarged  plant  is  necessary 
in  order  to  meet  the  desires  and  abso¬ 
lute  necessities  of  the  public. 

EFFECT  OF  ECONOMIES 

It  is  said  that  the  increased  income 
needed  could  be  had  by  economies.  It 
is  true  that  economies  have  been  in¬ 
troduced,  and  there  is  room  for  more 
of  them.  Railroad  managers,  as  a 
whole,  are  pushing  hard  every  day  to 
improve  men,  methods,  and  facilities. 
Many  economies,  however,  can  only 
be  adopted  by  throwing  away  old 
appliances  and  buying  new  ones, 
which  is  the  case  in  mills  and  fac¬ 
tories  as  well  as  in  railroads.  And  if 
the  railroads  have  no  money  with 
which  to  get  the  new  tools,  they  must 
do  the  best  they  can  with  the  old  ones. 
No  effort  in  this  direction  should  be 
neglected,  and  no  other  industry  is,  or 
in  the  nature  of  things  can  be,  so 
thoroughly  organized  nation-wide  as 
the  railways  to  co-operate  in  studying, 
experimenting,  and  standardizing  their 
progress.  But,  in  view  of  the  won¬ 
derful  savings  already  accomplished, 
both  major  and  minor,  in  the  past  few 


13 


years,  and  in  spite  of  the  larger 
percentages  of  gross  earnings  ab¬ 
sorbed  by  expenses  and  taxes,  it  is 
doubtful  if  the  people  should  depend 
on  such  measures  to  offset  the  ap¬ 
parently  irresistible  rise  in  wages  and 
in  the  price  of  materials,  the  higher 
cost  of  capital,  and  the  demands  for 
more  elaborate  facilities  and  luxurious 
service. 

Are  any  of  these  obstacles  sufficient¬ 
ly  important  to  delay  such  revision  of 
rate  schedules  as  will  meet  this 
anomalous  situation  of  increasing 
gross  earnings,  but  declining  net 
earnings,  and  still  more  rapidly  de¬ 
clining  net  corporate  income  after  pay¬ 
ment  of  fixed  charges? 

The  railway  managers  of  the  coun¬ 
try  want  to  know  where  to  improve. 
They  welcome  just  criticism  based  on 
a  real  knowledge  of  all  the  actual 
facts.  It  is  their  purpose  to  profit  by 
it.  To  serve  the  public  adequately,  on 
the  other  hand,  is  also  their  purpose, 
and  it  is  their  duty  to  seek  diligently 
from  the  appropriate  authorities  the 
sanction  and  help  necessary  if  the 
railway  is  to  do  what  the  people  want 
and  must  have  if  the  country  is  to 
grow.  So  it  would  seem  as  if  it  was 
to  the  interest  of  the  people  to  be 
patient  with  a  railway  which  has 
practically  no  control  over  the  price  of 
what  it  has  to  sell — transportation — 
and  very  little  control  over  the  price 
of  labor  needed  to  produce  that  trans¬ 
portation. 

New  England  is  a  great  educational 
and  financial  force.  She  has  sent  her 
sons  all  over  the  country  to  help  do 
the  work  needed.  In  the  last  edition 
of  “Who’s  Who  in  America”  twenty 
per  cent,  of  the  names  are  those  of 
men  born  in  New  England.  Anything 
that  affects  adversely  the  credit  and 


social  welfare  of  New  England  will 
in  turn  affect  the  whole  country.  Her 
welfare  and  the  welfare  of  her  rail¬ 
ways  are  important  to  the  entire 
country.  These  six  New  England 
States  have  one- fourteenth  of  the 
national  population  and  have  one- 
twelfth  of  the  national  wealth.  They 
consume  one-eighth  of  the  materials 
of  manufacture  and  they  have  one- 
sixth  of  the  bank  deposits.  For  the 
New  England  Lines,  that  I  represent, 
I  ask  the  patient  good-will  of  her 
people  and  of  the  nation,  while  her 
peculiar  and  difficult  transportation 
problems  are  being  solved.  (Great 
applause.) 

I  don’t  think  I  ever  sat  in  a  Board 
that  felt  so  badly  as  the  New  Haven 
Board  did  yesterday  when  the  figures 
forced  them  to  make  the  decision  that 
took  away  a  dividend,  coming  at 
Christmas  time,  from  thousands  and 
thousands  of  people.  (Applause.) 
But  they  had  the  courage  to  take  that 
position  because  they  felt  in  the  long 
run  it  would  be  better  for  the  proper¬ 
ty,  better  for  New  England,  and  better 
for  the  stockholders  themselves.  (A 
VOICE:  Good,  good!) 

The  business  men  of  the  country 
who  benefit  from  the  accumulated 
savings  of  New  England,  from  her 
large  purchases  from  other  parts  of 
the  country,  from  her  great  and  con¬ 
tinuous  contributions  to  the  national 
welfare  in  sending  out  trained  men 
and  women,  should  at  this  time  of 
storm  and  stress  help  the  situation  in 
every  reasonable  way.  It  is  to  your 
interest  to  do  it  and  as  patriotic 
citizens  interested  in  the  welfare  of 
the  whole  country  I  ask  you  most 
earnestly  to  help.  (Great  outburst  of 
applause  and  prolonged  cheering,  Mr. 
Elliott  rising  and  bowing.) 


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